Deribit Exits Russia Amid EU Sanctions, Leaving Traders in Limbo

Crypto derivatives exchange Deribit has announced its exit from the Russian market, citing new European Union (EU) sanctions. The Dutch-based company stated that it can no longer provide services to Russian citizens and residents, with exceptions made for those with dual citizenship in an EEA country or Switzerland, or those living there permanently. Russians living in the UAE and all Russian companies are banned from the platform.

Deribit's decision comes in response to EU rules that prohibit European crypto companies from serving Russian citizens or businesses following Russia's invasion of Ukraine. The company believes that the crypto market should be open to all, and Russia's new regulations are taking away that freedom from Russian citizens, making it a costly affair for traders. As a result, Deribit is moving out to opt for a more favorable regulatory environment.

Since the conflict with Ukraine, Russia has been hit with heavy international sanctions, including being cut off from the SWIFT system, making it difficult to process international payments. As a workaround, Russian companies have turned to cryptocurrencies like Bitcoin for cross-border transactions. Finance Minister Anton Siluanov confirmed this strategy, and even government officials supported it at last year's BRICS Summit. However, using crypto for payments within Russia is still banned.

Deribit previously operated in Russia despite U.S. sanctions, but the new EU rules left the company with no choice but to exit. From February 17, new trades will be blocked, and by March 29, full access will be revoked. In 2023, Deribit moved its operations to Dubai to handle regulatory pressures better. However, Russians living in Dubai are not allowed to register on the platform.

Deribit's departure is a significant development, showing how even global crypto exchanges are feeling the heat from geopolitical tensions. For Russian traders, this means fewer options to access major crypto platforms, making it harder to navigate the international financial system. However, this decision could affect Deribit's operations more than the Russian crypto market.

With Deribit exiting, Russian traders are likely to seek alternative platforms. Many may shift to decentralized exchanges (DEXs) like Uniswap and dYdX, which are harder to regulate. Centralized exchanges that are not bound by EU regulations, such as OKX, Bybit, and some offshore platforms, could also see an influx of Russian users. Monitoring changes in trading volumes